Government Ensures KUR Interest Rate Remains at 6 Percent

Coordinating Minister for Economic Affairs Airlangga Hartarto has stated that the government is ensuring the increase in Bank Indonesia’s benchmark interest rate will not affect the People’s Business Credit (KUR) rate, which remains at 6 per cent per annum. Airlangga explained that the KUR interest rate is set through a government subsidy scheme for micro, small, and medium enterprises (MSMEs), meaning it does not directly follow changes in the BI Rate. “The increase in the BI Rate does not change the People’s Business Credit rate provided by the government, which remains at 6 per cent. So, 6 per cent is the subsidised interest rate given by the government to MSMEs,” he said at the Smesco Building in Jakarta on Monday. He emphasised that the government continues to provide KUR interest subsidies to maintain affordable financing access for MSMEs. Furthermore, Airlangga noted that the government is also increasing the KUR distribution ceiling specifically for the housing sector. “The government is even adding to the People’s Business Credit, for example for housing, the amount has been raised to Rp50 trillion. The interest rate remains the subsidised KUR rate,” he said. KUR is a government-subsidised financing programme aimed at expanding capital access for MSMEs and productive sectors. The Ministry of MSMEs recorded that nationally, as of 25 June 2026, KUR distribution realisation had reached Rp143.2 trillion, or 49.3 per cent of the 2026 target of Rp290 trillion. This financing has reached approximately 2.2 million MSME debtors, comprising around 1.1 million new debtors and 511,000 graduated debtors. The national portion of KUR distribution to the production sector has reached 64.1 per cent. The government is targeting KUR distribution of Rp290 trillion in 2026, aimed at 1.3 million new debtors and 1.1 million graduated debtors, with at least 65 per cent of financing channelled to the production sector.